Thursday, 19 July 2012

Danish lessons

Anyone who has read the letters columns of our local newspapers would think twice before dipping a toe into the debate about wind energy, but having mentioned Denmark in a previous post, it is worth taking a slightly more detailed look at how another small country has gone about tackling its energy problems.

Most of the information here is taken from a recent article in Der Spiegel, a respected German current affairs magazine.

Back in the 1970s Denmark was hit hard by the dramatic rise in oil prices at the time. Denmark did not have coal, and it had not yet developed its small offshore oil and gas fields at the time. The country also had (and still has) a health and social welfare system the like of which we in Wales can only dream about.

By the beginning of the 1980s, high public spending and borrowing and an almost total reliance on energy imports had brought the country to the brink of disaster. One of my first jobs, as it happens, was covering financial and economic news in the Nordic countries, and I can well remember the dire headlines in the Danish press.

A farmer's son in Jutland developed the first prototype of a commercial wind turbine which was sold in 1979 to Vestas, a company which then manufactured tractors and cranes. Vestas is now the world's largest producer of wind energy technology.

24% of Denmark's electricity is now produced by wind energy, more than any other country worldwide, and it aims to raise the share to 50% by 2020. By 2050 Denmark aims to have eliminated its dependence on fossil fuels.

Opposition to wind turbines is not confined to Britain, so the question is how has a small country which is one of the most democratic, liberal and transparent nations in the world managed to pursue such a radical energy policy without getting bogged down in endless planning battles, court cases and parliamentary enquiries? How has it managed to persuade its people that there is something in this for everyone?

An example of this is a wind farm built just 3 kilometres offshore from central Copenhagen. There are 20 turbines, each around 100 metres tall and each capable of generating 2 Megawatts. The development attracted just 4 objections, and it went into production in 2001. At the time it was the largest of its kind in the world.

The company which operates the wind farm is a cooperative. 8,600 members own 50% of the shares, with the rest being held by a state energy company.

Individual, small private investors in Denmark played a key role in getting the industry started, and it developed into something of a popular movement. The huge projects being developed now need far larger sums of capital, however, but alongside the overseas investors, Danish local government and the country's pension funds are also key players.

A decisive factor in all this has been the country's emphasis on showing its people that they can benefit directly from this investment.

Unlike other countries, in Denmark it is the government which decides where it wants turbines, in cooperation with local government. It also carries out all of the technical and environmental analysis on the sites chosen before inviting tenders from investors.

This central planning process also means that investors can be sure that they will not get bogged down in appeals or have to jump through more hoops, while the state can be reasonably sure of hitting its targets.

The transparency of the process is also a key ingredient in ensuring that the public has faith and trust in it, and it also makes corruption a near impossibility.

It would be wrong to claim that there is no opposition to wind farms in Denmark, particularly when it comes to onshore developments, but here the Danes go out of their way to make schemes attractive to local people. Part of the profits from the turbines is fed back to local government to pay for environmental improvement projects; home owners are compensated if their property values are affected, and the state provides local operators with financial guarantees.

The senior civil servant in overall charge of the country's wind energy policy told the German magazine that there certainly would be something rotten in the state of Denmark if the public responded to every new project with protests and court cases.

As usual, we can learn a lot from looking at our neighbours, and not just those across Offa's Dyke..